Higher Education Law Report

The Trademark Clearinghouse ("TMCH") officially launches today, March 26th.  The TMCH was created to help trademark holders prevent trademark infringement or misuse in the face of new top-level domains (TLDs) that are expected to launch over the next few years.  There are nearly 2,000 applications for these new TLDs, and include domains such as ".inc" .home" and ".kitchen" among many others.  There is valid concern among trademark owners that registration of domains like the following will confuse consumers about the source of the domain and its content: It would be prohibitively expensive, however, for a trademark owner to have to register their marks in every one of those 2,000 domains in order to block squatters or prevent trademark infringement. Thus, the TMCH was created to protect trademarks in two ways:

1. Sunrise Service - at least 30 days before a domain name is offered to the general public, trademark holders who have registered with the TMCH will be able to register their domain name in the TLD.  In other words, TMCH registrants will be able to purchase before the general public can; and
2. Claims Services - when a potential domain name registrant attempts to register a domain name that matches a trademark term in the TMCH, he or she will receive  a warning notice.  If the domain name is ultimately registered, the trademark holder with the corresponding mark will receive notification of the domain name registration, allowing them to take appropriate action.

Registration costs are $150 per mark per year, with minor discounts available for 3 or 5 year registrations. Eligible marks include:

• Nationally or regionally registered word marks from all jurisdictions;
• Word marks that have been validated through a court of law or other judicial proceeding;
• Word marks protected by a statute or treaty in effect at the time the mark is submitted to the Clearinghouse for inclusion; and
• Other marks that constitute intellectual property may be recorded in the Clearinghouse by arrangement with a registry.

Image: By Rock1997 (Own work) [GFDL or CC-BY-SA-3.0-2.5-2.0-1.0], via Wikimedia Commons

The Obama administration has taken a step towards its goal of ensuring public access to federally funded research.  In a policy memorandum released on February 22, 2013 (see "Increasing Access to the Results of Federally Funded Scientific Research"), the Office of Science and Technology Policy  has directed Federal agencies with more than $100M in R&D expenditures to develop plans to make the published results of federally funded research freely available to the public within one year of publication and requiring researchers to better account for and manage the digital data resulting from federally funded scientific research.  The memorandum is in part a response to a We the People petition signed by over 65,000 people requesting better access to taxpayer-funded research. The policy memorandum states that digitally formatted scientific data resulting from unclassified research supported wholly or in part by Federal funding should be stored and publicly accessible to search, retrieve, and analyze. For purposes of the memorandum, data is defined, consistent with OMB circular A-110, as the digital recorded factual material commonly accepted in the scientific community as necessary to validate research findings including data sets used to support scholarly publications, but does not include laboratory notebooks, preliminary analyses, drafts of scientific papers, plans for future research, peer review reports, communications with colleagues, or physical objects, such as laboratory specimens. Six-month Deadline to Provide a Plan Within 6 months from the issuance of the policy, each affected federal agency must provide a plan that provides for the following:

• a strategy for leveraging existing archives, where appropriate, and fostering public/private partnerships with scientific journals relevant to the agency’s research;

• a strategy for improving the public’s ability to locate and access digital data resulting from federally funded scientific research;

• an approach for optimizing search, archival, and dissemination features that encourages innovation in accessibility and interoperability, while ensuring long-term stewardship of the results of federally funded research;

• a plan for notifying awardees and other federally funded scientific researchers of their obligations (e.g., through guidance, conditions of awards, and/or regulatory changes);

• an agency strategy for measuring and, as necessary, enforcing compliance with its plan;

• identification of resources within the existing agency budget to implement the plan;

• a timeline for implementation; and

• identification of any special circumstances that prevent the agency from meeting any of the objectives set out in this memorandum, in whole or in part.

Further, each agency’s public access plan must, among other things, also:

• ensure that extramural researchers receiving Federal grants and contracts for scientific research and intramural researchers develop data management plans, as appropriate, describing how they will provide for long-term preservation of, and access to, scientific data in digital formats resulting from federally funded research, or explaining why long-term preservation and access cannot be justified; and

• allow the inclusion of appropriate costs for data management and access in proposals for Federal funding for scientific research.

Stay Tuned As this public access policy will affect university researchers and contract administrators, becoming and maintaining familiarity with the policy is important.  We will post periodic updates as more information becomes available about the policy and the various agency plans released for implementation of the policy.

The Intellectual Property & Technology Group at Bond, Schoeneck & King, PLLC is pleased to announce the Winter 2013 IP & Technology Newsletter.  This edition of Bond’s quarterly newsletter includes the following articles:

• "Supreme Court Decisions Will Have Major IP Impact in 2013" (by Jeremy P. Oczek)

• "Protecting Trade Secrets and Other Confidential Business Information" (by Scott M. Philbin)

• "Color Prevails: Louboutin Retains 'Red Sole' Trademark" (by Philip I. Frankel)

• "Design Patents: Effective Tools in a Patent Portfolio" (by David L. Nocilly)

• News & Highlights

Like patent protection, copyright protection is limited in time.  For example, a work published in the United States is eligible for copyright protection for the life of the author plus 70 years.  Anonymous works, pseudonymous works, and works made for hire are eligible for a term of the shorter of 95 years from publication or 120 years from creation.  For more information about copyright term, see here. For example, a work authored by Author X in 1980, who died on May 4, 1994, would be eligible for copyright protection until May 4, 2064.  And due to 17 USC § 305, the term of copyright would extend throughout the remainder of 2064.  So, the work would enter the public domain on January 1, 2065. However, copyright term has not always been so long.  For example, a work published before the 1976 Copyright Act extended copyright term would have originally been eligible for 56 years of copyright protection (an initial 28-year term plus a 28-year renewal).  Under this pre-1976 regime, works published in 1956 would have entered the public domain on January 1, 2013.  Due to the 1976 Copyright Act these works will not enter the public domain until January 1, 2052 (95 years from publication, provided that certain formalities were met and the copyright was renewed after the initial 28 year term). Center for the Study of the Public Domain Every year, Duke University's Center for the Study of the Public Domain releases a list of famous works that would have entered the public domain on January 1^st under the pre-1976 Copyright Act regime. Works that would have entered the public domain on January 1^st, 2013 include famous books (e.g., Philip K. Dick’s “Minority Report”), famous periodicals (e.g., the first issue of MAD magazine), famous movies (e.g., The King and I starring Yul Brynner), and famous songs (e.g., In the Still of the Night performed by The Five Satins). For the full list see the Center’s post at “What Could Have Entered the Public Domain on January 1, 2013?”  Also, for more information about copyright and the public domain, see the “Public Domain Day Frequently Asked Questions.”

• First-Inventor-to-File Final Rules (78 Fed. Reg. 11024, February 14, 2013) (available at http://federalregister.gov/a/2013-03453) (“Rules”)

• First-Inventor-to-File Final Guidance (78 Fed. Reg. 11059, February 14, 2013)  (available at http://federalregister.gov/a/2013-03450) (“Guidelines”)

“Even if the only differences between the subject matter in the prior art disclosure that is relied upon under 35 U.S.C. 102(a) and the subject matter publicly disclosed by the inventor before such prior art disclosure are mere insubstantial changes, or only trivial or obvious variations, the exception under 35 U.S.C. 102(b)(1)(B) does not apply.”

“[T]here is no requirement that the mode of disclosure by an inventor or joint inventor be the same as the mode of disclosure of an intervening disclosure (e.g., inventor discloses his invention at a trade show and the intervening disclosure is in a peer-reviewed journal). … [T]here is no requirement that the disclosure by the inventor or a joint inventor be a verbatim or ipsissimis verbis disclosure of an intervening disclosure in order for the exception based on a previous public disclosure of subject matter by the inventor or a joint inventor to apply.”

Seventy years ago the Metro-Goldwyn-Mayer film The Wizard of Oz opened in movie theaters around the world. Although the initial 1939 release of the movie failed to earn much more than the costs of production, advertising, and distribution, it has since earned millions of dollars in revenue from licensing fees. As the world celebrates the 70th anniversary of The Wizard of Oz, we take a look at the current federal copyright protection for this beloved classic and determine when the movie will lose that protection and enter the public domain. Dorothy Gale began as a character in the children's novel The Wonderful Wizard of Oz, authored by Lyman Frank Baum and illustrated by William Wallace Denslow. Baum, more commonly known as L. Frank Baum, was born May 15, 1856 in Chittenango, New York. After several careers including store proprietor and newspaper editor, Baum partnered with Denslow in Chicago, Illinois in 1899 to publish the nonsensical poetry book Father Goose, His Book. Less than a year later the duo completed their second and most popular collaboration, The Wonderful Wizard of Oz. The Wonderful Wizard of Oz was first published by the George M. Hill Company on May 17, 1900 and according to some sources was officially registered with the United States Copyright Office on August 1st of that year. The book was instantly a best-seller, and in the 109 years since its first publication it has sold millions of copies in countries all over the world. Copyright and Baum's Book When the novel was published, the duration of copyright protection was still determined under the Copyright Act of 1831. Under this Act, a work was eligible for an initial 28-year term of protection beginning on the date of publication (which was double the 14 years granted by the original 1790 Copyright Act). At the end of the initial 28 years, the term could optionally be extended by the copyright holder for another 14 years, resulting in a total 42 years of copyright protection. As a result, The Wonderful Wizard of Oz was set to enter the public domain in 1942. However, just 9 years after the novel was published Congress passed the 1909 Copyright Act. This Act kept the initial copyright term of 28 years but extended the renewal term from 14 years to 28 years for a total 56 years of protection. Since the extension applied to works with existing copyright protection as well as future works, Baum and Denslow received a 14-year extension of their copyrights. Unfortunately, Baum and Denslow were not able to enjoy the success of their novel for very long; Denslow died at age 59 in 1915 and Baum died at age 62 in 1919. The Wonderful Wizard of Oz, however, continued to prosper. In 1928 the copyright registration was renewed for an additional 28 years, and just a few years later Samuel Goldwyn purchased the screen and book rights the novel for the sum of $40,000. In 1956, just fifty-six years after Baum wrote the novel, the second 28-year term ended and the novel entered the public domain. (a free digital copy of the original The Wonderful Wizard of Oz can be obtained from the Gutenberg Project). Although the children's novel The Wonderful Wizard of Oz lost copyright protection in 1956, only the original novel by Baum and illustrations by Denslow have entered the public domain. Any newly-created material such as illustrations created for a new publication of the novel, will still be eligible for copyright protection because they are new works. Similarly, any derivative works based on the novel will potentially be eligible for protection. Section 101 of the Copyright Act defines a "derivative work" as "[a] work based upon one or more preexisting works" or "[a] work consisting of editorial revisions, annotations, elaborations, or other modifications, which, as a whole, represent an original work of authorship." Accordingly, new material added to an annotated version of the novel created, for example, in anticipation of the up-coming 110th anniversary of the novel's publication would not be in the public domain. The author of this new material would have a protectable interest in her work. Perhaps even more confusing, a new compilation of some of Baum's Oz-related stories might be eligible for copyright protection even if all those novels have been in the public domain for years. The creativity involved in selecting which public domain stories to include, and in what order to include them, would likely be eligible for copyright protection. Accordingly, although someone could copy all the individual stories within the Oz compilation (provided they did not have any new or otherwise protectable material), they could not copy all the works and then provide them in the same manner as the protected compilation. However, if someone selected all of Baum's works and presented them in chronological order in a compilation, there would likely not be enough creativity to establish copyright protection. When analyzing the copyright status of a work such as The Wonderful Wizard of Oz, it is important to note the contributor or creator of each part of the particular work in question. Copyright and the 1939 Film Unlike Baum's novel, the classic film The Wizard of Oz is still protected by copyright, but only as a result of several extensions granted by Congressional enactment. Under the 1909 Copyright Act, the 1939 film was eligible for a total 56 years of copyright protection (an initial 28-year term plus a 28-year renewal). As a result, someone living between 1939 and 1962 and planning to celebrate the day that Oz entered the public domain would have 1995 circled on their calendar (1939 + 28 years + 28 years). Indeed, if there had not been any additional reform of copyright duration, Judy Garland's famous portrayal of Dorothy Gale would have already been in the public domain for 14 years. Between 1962 and 1974, however, Congress passed several pieces of legislation that slowly increased the duration of copyright protection, each temporarily delaying the impending termination of copyrights in their second term. The 1974 extension, for example, delayed any terminations set to occur between 1962 and 1976 until December 31, 1976, effectively extending the length of the renewal term from 28 years to 42 years. By now the poor party-planning soul was completely unsure of the date that Oz would enter the public domain, but was tentatively making plans for 2009 (1939 + the 28 year initial term + a 42 year renewal). This year's 70th anniversary celebration of The Wizard of Oz might have also seen the movie enter the public domain. Once again, however, Congress stepped in to enact one of the biggest reforms of copyright law in history. Under the 1976 Copyright Act, the renewal term for works that had been created prior to January 1, 1978 were extended to a total of 47 years, thereby adding another 5 years onto the term of Oz's current copyright and delaying the date it entered the public domain from 2009 to 2014. The Act also set which day of the year a work would lose protection, providing that all terms of copyright would run through the end of the calendar year in which they would expire. As a result, Oz was set to enter the public domain at the stroke of midnight on December 31, 2014. Twenty-two later, however, Congress passed the Sonny Bono Copyright Term Extension Act and The Wizard of Oz received the longest term extension to date. For pre-1978 works that were still under copyright protection, the Act extended the renewal term from 47 years to 67 years, resulting in a total 95 years of protection from the date of publication. By now the party-planner was likely apoplectic but hopefully in good enough health to wait until 2034, the year that the movie is currently scheduled to enter the public domain:

1909 Copyright Act

28 years

The Wizard of Oz has been fortunate to enjoy the many term extensions granted by legislation during the past 50 years. Indeed, the duration of the movie's copyright protection has been extended by a total of 39 years from an original termination date of 1995 to the current date of midnight, December 31, 2034. The movie's 95 years of copyright protection will be a great deal more than the 56 years given to Baum's original novel. While it remains a possibility that Congress could once again prolong the duration of copyright protection for older works such as the 1939 film, the current terms of duration are relatively similar to terms around the world. It is very likely, therefore, that at midnight on December 31, 2034, The Wizard of Oz film will enter the public domain.

The U.S. District Court for the Northern District of New York recently became the latest court to enact local patent rules.  Effective as of January 1, 2012, the new local patent rules apply to all new patent cases filed in, transferred to, or removed to the court on or after that date.  For all patent cases pending on that date, the court will confer with the parties and apply the rules as the court “deems practicable.” The new rules were developed by an ad hoc committee impaneled by Magistrate Judge David E. Peebles.  In addition to J. Peebles, the committee featured local patent practitioners and included George McGuire, chairman of Bond’s intellectual property practice group. Among the more salient points in the new rules is the speed in which the court brings the case from filing through to claim construction.  As is discussed in greater detail below, the rules propose a schedule that rivals those found in other patent forums. Other significant aspects of the new local patent rules are highlighted below.

1. Arduous Contentions: rules call for substantial mandatory production of contentions, documents, and information early in the case

The NDNY rules call for a swift progression of the case following its commencement.  For example, the patent claimant’s Infringement Contentions are due within 14 days after the Rule 16 conference, which means that the patentee will make their infringement contentions without the benefit of discovery from the accused infringer, unless a later date for infringement contentions is stipulated to or ordered. The NDNY rules also provide for mandatory disclosure of documents and information early in the proceedings.  Accordingly, both the patent claimant’s contentions and the accused infringer’s contentions are accompanied by substantial document production. Infringement Contentions Under L. Pat. R. 3.1, the patent claimant provides Infringement Contentions for the asserted claims just 14 days after the Rule 16 conference.  As is standard in most districts with local patent rules, the NDNY rules require a chart identifying specifically where each limitation of each asserted claim is found within each Accused Instrumentality.  Interestingly, the Infringement Contentions must also include a claim-by-claim analysis of the applicable priority date if the patent claims priority to an earlier application, as well as a description of the role of each party if direct infringement is based on joint acts of multiple parties. The NDNY rules also require the production of the following documents with the patentee’s Infringement Contentions, including: (1) all documents evidencing disclosure, sale, or public use of the claimed invention prior to the application for the patent(s)-in-suit; (2) all documents evidencing the conception, reduction to practice, design, and development of each claimed invention; (3) a copy of the file history for each patent-in-suit; and (4) all documents evidencing ownership and maintenance of the patent rights by the party asserting patent infringement. Non-Infringement, Invalidity and Unenforceability Contentions One month after receiving the Infringement Contentions, the accused infringer must provide Non-Infringement, Invalidity and Unenforceability Contentions.  Included with these contentions are two charts that have become standard in many districts, including one demonstrating whether each element of the asserted claims is present in the Accused Instrumentality, and a denial with explanation if it is not, and another identifying where specifically in each item of prior art each limitation or view of each asserted claim is found. Unlike many other districts, however, L. Pat. R. 3.3(c) calls for the accused infringer to set forth in detail each ground that it will use to assert that the patent(s)-in-suit is unenforceable.  For inequitable conduct claims, the accused infringer must: (1) describe each omission or misrepresentation made to the PTO; and (2) state all grounds on which it plans to argue at trial that those prosecuting the patent intended to deceive the PTO.  This includes the identification of any prior art references not disclosed to the PTO during the prosecution of the patent(s)-in-suit, any facts suggesting that one or more persons substantially involved in the prosecution of the patent(s)-in-suit, were aware of such prior art reference prior to the issuance of the patent in suit, and any facts relevant to the element of intent to deceive.  Although the unenforceability contentions are subject to amendment in the event of later discovered facts, the rules set forth a substantial initial burden on the accused infringer considering unenforceability allegations. The accused infringer must also supply certain documents when providing Non-Infringement, Invalidity and Unenforceability Contentions.  Among the documents that must be provided are: (1) source code, specifications, schematics, flow charts, artwork, drawings, photographs, video or other images from every available view or other documentation sufficient to show the operation, composition, design, or structure of any aspects or elements of the accused instrumentality identified by the patent claimant; and (2) a copy of any prior art that doesn’t appear in the file history of the patent-in-suit.

2. Prioritized and Limited Claim Construction: the parties must prioritize the disputed terms, which can number no more than ten

Similar to the local patent rules for the Northern District of Illinois, for example, the parties may only present a total of ten patent terms or phrases to the court for construction.  Exceptions can be made in cases where multiple non-related patents are asserted.  If the parties are unable to agree on ten terms or phrases, the plaintiff(s) can elect five and the defendant(s) can elect five. After exchanging lists of disputed terms, the parties have three weeks to exchange preliminary proposed constructions in which they not only construe the claim terms, but also identify all intrinsic evidence found in the specification and the prosecution history and produce copies of any extrinsic evidence. The parties then create a Joint Claim Construction and Prehearing Statement which is largely similar to the preliminary proposed constructions.  Interestingly, however, the Joint Claim Construction includes a prioritization of the disputed terms.  The prioritization is based on the claim terms’ “significance to the resolution of the case and the court’s construction of those terms and whether they will be case or claim dispositive or substantially conducive to promoting settlement, together with a statement of the significance of each term to the claims and defenses in the case.” This rule forces patent claimants and accused infringers to work together to create a prioritized list of claim terms.  Although the requirement for a statement regarding the significance of each term to the party’s claims or defenses may disclose a party’s strategy, parties typically have a strong grasp of their opponents’ claim construction strategy by the time a Joint Claim Construction chart is created.

3. Deadlines for Discovery: the rules include automatic close of both claim construction and fact discovery

Within thirty days of the Joint Claim Construction and Prehearing Statement, the parties must complete all discovery relating to claim construction, including any depositions with respect to claim construction of any fact and expert witnesses previously identified.  Further, all fact discovery in the case – including expert depositions – must be completed within 120 days after the court issues its claim construction ruling.

4. Speedy Docket: schedule leads to full Markman briefing within 10 months

Under the new rules, the case is scheduled to be fully briefed for a claim construction hearing within about 10 and a half months after filing the complaint.  For comparison, the local patent rules for the Northern District of Illinois call for full claim construction briefing within about 12 months after filing the complaint.

5. Confidentiality by Default: a protective order is entered by the court if the parties are unable to agree on one

At least two weeks prior to the initial Rule 16 conference, the parties may submit a stipulated protective order pursuant to Fed. R. Civ. P. 26(c).  If the parties are unable to agree on a protective order they may each submit a counter proposed protective order that highlights any areas of disagreement.  If no one requests a confidentiality order at or prior to the Rule 16 scheduling conference, the court will itself enter a protective order. Conclusion The adoption of patent rules in the Northern District of New York reflects the court’s interest in patent cases and will likely be a strong consideration for parties looking for swift and timely resolution of patent disputes.

The Intellectual Property & Technology Group at Bond, Schoeneck & King, PLLC is pleased to announce the official publication of the Spring 2012 IP & Technology Newsletter (pdf).  This second edition of Bond's quarterly newsletter includes articles on:

• The Pinterest copyright controversy (by Blaine T. Bettinger)

• The U.S. Supreme Court’s Prometheus decision and the future of diagnostic patents (by Jeremy P. Oczek)

• Recent developments to streamline e-discovery in patent cases (by Fred J.M. Price)

• Adoption of Local Patent Rules by the N.D.N.Y. (by Blaine T. Bettinger)

• Technology spotlight on Rheonix, Inc. (contributed by William Greener)

• News & highlights from Bond’s IP Group (contributed by George R. McGuire & David L. Nocilly)

And don't miss the inaugural Winter 2012 edition of the IP & Technology Newsletter.    

Last Friday (May 11, 2012), Judge Evans of the Northern District of Georgia issued a long-awaited decision in the Georgia State e-reserves case entitled Cambridge Univ. Press v. Becker.  At a hefty 350 pages, the decision will generate a great deal of analysis and interpretation over the coming days. One-Sentence Summary: Judge Evans’ decision provides some guidance for institutions of higher education attempting to craft copyright policies and conduct fair use analyses, and holds that Georgia State University’s fair use defense failed in only five of the 99 instances of claimed infringement. Quick Background In 2008, three publishers (Cambridge University Press, Oxford University Press, and Sage Publications) sued members of Georgia State University alleging that the University’s e-reserves system – through which students could access electronic content posted by faculty – infringed copyrights held by the publishers. In response, the University reviewed their existing copyright policies and drafted a new Copyright Policy that took effect in 2009 and which included a “fair use checklist” to help faculty and students understand and apply the fair use doctrine. In February 2010, both sides filed summary judgment motions.  The Court denied the publisher’s motion in full, but granted the University’s motion in part as to the claims of direct and vicarious infringement (leaving open the claim of contributory infringement).  The Court also agreed with the University’s argument that only the infringement claims post-dating the 2009 Copyright Policy were relevant to publishers’ claims for injunctive and declaratory relief. The publishers were then required to show that there was ongoing misuse of the fair use defense by the University despite the 2009 Copyright Policy.  In March 2011, they introduced evidence detailing 99 alleged infringements (later reduced to 75 after trial).  The trial began on May 17, 2011.  At the close of the publishers’ case, the Court granted the University’s motion for judgment on the claim of contributory infringement, leaving only the claim that the 2009 Copyright Policy caused copyright infringement. For the past year, both sides have awaited Judge Evans’ decision. The Decision

1. Valid Copyright Not Proven

Judge Evans held that the publishers failed to establish that they owned a valid copyright in many of the 99 instances of claimed infringement.  For example, for several of the works the publishers were unable to produce either a registration certificate or an assignment from the author to the publisher.  The Court steadfastly refused to overlook the missing documentation.

2. The Fair Use Defense

In the decision, Judge Evans conducted an extensive analysis of each of the four factors in the fair use analysis:

1. the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes;
2. the nature of the copyrighted work;
3. the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and
4. the effect of the use upon the potential market for or value of the copyrighted work.

The Court immediately held that the first factor heavily weighs in favor of the University and that the second factor weighs in favor of the publishers (see below). Accordingly, the remainder of the decision hinged on the third and fourth fair use factors. While discussing “the amount and substantiality of the portion used in relation to the copyrighted work as a whole,” Judge Evans largely dismissed the 1976 Classroom Guidelines, emphasizing that they “were not prepared by the legislators” and noting that the Guidelines’ numerical caps on how much of a work a teacher may copy under fair use “stands in contrast to the statutory scheme described in § 107.”  Accordingly, whether the University adhered to the Guidelines was not dispositive to the fair use analysis. In a portion of the decision that will undoubtedly be extensively analyzed over the coming weeks, the Court provided the following conclusions regarding the third fair use factor:

“Where a book is not divided into chapters or contains fewer than ten chapters, unpaid copying of no more than 10% of the pages in the book is permissible under factor three…In practical effect, this will allow copying of about one chapter or its equivalent. Where a book contains ten or more chapters, the unpaid copying of up to but no more than one chapter (or its equivalent) will be permissible under fair use factor three. Excerpts which fall within these limits are decidedly small, and allowable as such under factor three. Access shall be limited only to the students who are enrolled in the course in question, and then only for the term of the course. Students must be reminded of the limitations of the copyright laws and must be prohibited by policy from distributing copies to others. The chapter or other excerpt must fill a demonstrated, legitimate purpose in the course curriculum and must be narrowly tailored to accomplish that purpose.”

Interestingly, the Court’s numerical cap of one chapter per ten-chapter books appears to be just as restrictive as the 1976 Classroom Guidelines that Judge Evans’ repudiated as being non-dispositive earlier in her decision.

3. Individual Analysis of Each Instance of Claimed Infringement

Following a 247-page analysis of 75 instances of claimed infringement, the Court concluded that only five instances of copying were not fair use and thus constituted copyright infringement.  For each instance the Court concluded that the instructor had copied more than a decidedly small amount of the book by making available more than one chapter of a book with more than ten chapters, and that the book made substantial revenues via licensing.  For example, for one of the books the Court found copyright infringement even where the two full chapters represented only 37 pages and 3.01% of the total work.

4. The 2009 Copyright Policy

Finding that unlicensed use of a total of 5 excerpts constituted copyright infringement, the Court next asked if the 2009 Copyright Policy caused those infringements.  It did, Judge Evans found, because the policy did not do the following:

• it did not limit copying “to decidedly small excerpts” (per the new 10% or one-chapter rule set forth by the Court in this decision);
• it did not “proscribe the use of multiple chapters from the same book;” and
• it did not “provide sufficient guidance in determining the “actual or potential effect on the market or the value of the copyrighted work” (factor four of the fair use analysis).

Interestingly, according to the Court the “only practical way to deal with factor four in advance likely is to assume that it strongly favors the plaintiff-publisher (if licensed digital excerpts are available).” Although Judge Evans found that the University tried to comply with the Copyright Act by enacting the 2009 Copyright Policy, the University’s intent was irrelevant to the infringement analysis. What’s Next? The parties will now brief the Court on injunctive and declaratory relief arising from the five instances of copyright infringement. The Way Forward for Universities The Court’s ruling may provide some guidance to institutions of higher education in similar circumstances who have adopted or are working to adopt copyright policies, although the impact of her decision remains to be seen.  Specifically, Judge Evans came to the following conclusions regarding the fair use analysis:

1. If the use is for teaching and research by a non-profit, the first fair use factor (the purpose and character of the use) weighs “heavily” in favor of the university;

2. If the works are non-fiction and educational in nature, the second fair use factor (the nature of the copyrighted work) weighs in favor of the university;

3. If the excerpt is less than 10%, or no more than one chapter of a book with more than ten chapters, then the third fair use factor (the amount and substantiality of the portion used in relation to the copyrighted work as a whole) weighs in favor of the university; and

4. If a university can readily obtain a license in the appropriate format at a reasonable price, the fourth fair use factor (the effect of the use upon the potential market for or value of the copyrighted work) favors the publisher.

It should be noted, however, that the ruling will probably be appealed and thus is likely not the last word on the subject.  Stay tuned to the Higher Education IP Law Report for the latest on this case and others like it. For More Information: Here are a few links for further analysis of the decision:

• “The GSU decision — not an easy road for anyone” by Kevin Smith at Duke University;
• “Inside the Georgia State Opinion” by James Grimmelmann of New York Law School; and
• “Some Leeway, Some Limits” at Inside Higher Ed.

In late March, the United States Copyright Office proposed increased fees for copyright registrations (the public notice in the Federal Register is available at: http://www.copyright.gov/fedreg/2012/77fr18742.pdf). In 1997, Congress amended the Copyright Act to allow the Register of Copyrights (currently Maria A. Pallante) to set fees for Copyright Office services (subject to Congressional review).  Any change in fees must be based upon the results of a study of costs incurred by the Copyright Office.  The most recent fee study was initiated in October 2011 and made available in the Register’s public report, ‘‘Priorities and Special Projects for the United States Copyright Office’’(available at http://www.copyright.gov/docs/priorities.pdf). The Proposed Fees Currently, registration fees are $35 for a basic application submitted online, and $65 for an application submitted using a paper form.  The Office proposes raising the fees for an online claim to $65, and the fee for filing a claim using a paper application to $100. The Office also proposes a new, reduced fee of only $45 for a single author who files an online claim in a single work that is not a work made for hire. It is currently unclear whether a group registration – such as a registration of a group of related photographs – will be considered “a single work” and therefore eligible for the $45 fee, or whether it will be subject to the regular $65 fee.  See more here. A full list of the proposed price changes is available in the table beginning on page 5 of the public notice. Public Comment Period As part of the fee setting process, the Copyright Office has requested public comment on the proposed changes before they are submitted to Congress for review.  Comments can be submitted at: http://www.copyright.gov/docs/newfees/comments. Comments should be submitted to the Copyright Office no later than May 14, 2012.

On March 20, 2012, a unanimous Supreme Court held that patents claiming methods for refining the dosage of drugs used to treat autoimmune diseases were directed to laws of nature and therefore not eligible for patent protection. Mayo Collaborative Servs. v. Prometheus Labs. (pdf), No. 2010-1150 (March 20, 2012). This is a signficant decision that is expected to have important implications in the medical and biotechnology industries. The Prometheus Patents The two patents at issue (6,355,623 and 6,680,302) were directed to an application of the correlation between the concentration of metabolites (byproducts created when the body breaks down a drug) and the toxicity and efficacy of that drug. If the concentration of byproducts in the bloodstream of a patient is too low, the current dosage of the drug may not be effective; if the concentration is too high, the dosage might be toxic. The claims of the patents involve two steps: (i) an “administering” step in which the drug is given to patients suffering from an autoimmune disease; and (ii) a “determining” step in which the concentration of the metabolites in the patient are determined. The patient’s metabolite concentration is then compared to claimed ranges, and the physician can increase or decrease the amount of drug given to the patient depending on the comparison. The Supreme Court’s Decision In its decision, the Supreme Court held that the claimed methods were directed to laws of nature. Specifically, the claims recited the natural and pre-existing relationship between the concentration of metabolites in the blood and the likelihood that the dosage of the drug that resulted in that concentration would be ineffective or harmful. This relationship, the Court commented, is purely a consequence of the natural processes by which the human body metabolizes the drug. With respect to the patents at issue, the Supreme Court viewed the “administering” step as simply referring to the relevant audience – doctors who treat patients with the drug. Similarly, the “determining” step simply tells the doctor to engage in conventional and routine activity that doctors had been doing long before the patent. Lastly, the “wherein” clauses only inform the doctor about the relevant natural laws and how to apply them when making a decision about drug dosage. “Well-Understood, Routine, Conventional Activity” According to the Supreme Court, “the steps in the claimed processes (apart from the natural laws themselves) involve well-understood, routine, conventional activity previously engaged in by researchers in the field.” “To put the matter more succinctly, the claims inform a relevant audience about certain laws of nature; any additional steps consist of well understood, routine, conventional activity already engaged in by the scientific community; and those steps, when viewed as a whole, add nothing significant beyond the sum of their parts taken separately.” The Supreme Court explained that a law of nature will typically not be patent-eligible if elements already well-known in the art are simply applied to that law of nature. Instead, the application of elements to the law of nature must involve an “inventive concept” which is not conventional or obvious. Accordingly, Prometheus could not transform a law of nature into patent-eligible subject matter simply by adding the well-known and routine step of measuring metabolite levels in a patient. Justice Stephen Breyer, who authored the decision, summarized the Court’s analysis as follows:

If a law of nature is not patentable, then neither is a process reciting a law of nature, unless that process has additional features that provide practical assurance that the process is more than a drafting effort designed to monopolize the law of nature itself.

In other words, the Supreme Court appears to be saying “don’t dress a law of nature in sheep’s clothing” – such as claiming it with well-known elements or as part of a prior art process – and expect it to be patent eligible. A patent eligible claim must include more than than a general instruction to “apply a law of nature” – it must include activity that transforms a process “into an inventive application of the formula.” However, the Supreme Court’s decision does not provide clear guidance as to what types of activities will “transform” a process into an inventive concept that goes beyond a law of nature.